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                  U.S. Environmental Protection Agency
                  Office of Inspector General

                  At  a   Glance
                                                                  10-4-0001
                                                              October 5, 2009
                                                              Catalyst for Improving the Environment
Why We Did This Review

The Office of Inspector
General (OIG) received a
hotline complaint regarding
U.S. Environmental Protection
Agency (EPA) Assistance
Agreement Numbers
1004802070 and BG96483308,
awarded to the Eastern Band of
Cherokee Indians (EBCI),
Cherokee, North Carolina.

Background

EPA Region 4 awarded EBCI
Assistance Agreement Number
1004802070 for $259,964
(federal share) on June 20,
2007. The Region subsequently
issued two amendments that
increased the available funds
by $93,920 (total federal share
of $353,884). EPA awarded
Assistance Agreement Number
BG96483308 for $152,000
(federal share) on September
24,2007. The Region
subsequently issued an
amendment that increased the
available funds by $124,967
(total federal share of
$276,967).
For further information,
contact our Office of
Congressional, Public Affairs
and Management at
(202)566-2391.
.
To view the full report,
click on the following link:
www.epa.qov/oiq/reports/2010/
20091005-10-4-0001.pdf

        Internal Control Weaknesses under EPA Grant Nos.
        1004802070 and BG96483308, Awarded to the Eastern
        Band of Cherokee Indians, Cherokee, North Carolina
         What We Found
        EBCI does not have a conflict of interest and its SF 272s are correct and prepared
        in compliance with federal requirements, EPA policies, and grant terms and
        conditions. However, during the course of our examination, we identified
        significant deficiencies in internal control concerning equipment purchases and
        segregation of duties that we believe require immediate attention. Regarding our
        concern with equipment purchases, we found that:

            •   Some purchase authorizations were dated the same day equipment was
               delivered.
            •   EBCI did not always obtain three quotes.
            •   The Asset Compliance Officer did not always authorize purchases.

        Regarding our concern on segregation of duties, we found that one employee
        within the Office of Environment and Natural Resources - the Water Quality
        Section Supervisor - is authorized to write grant proposals; solicit funding to
        carry out the program goals; prepare budgets; oversee the expenditure of funds;
        and purchase, maintain, repair, and inventory all equipment.
         What We Recommend
        We recommend that the Regional Administrator, EPA Region 4, require EBCI to
        comply with its internal control policies and procedures with respect to
        equipment purchases, require all future purchases under these grants to be
        properly approved, and require that EBCI establish internal controls to ensure the
        proper segregation of duties for grant award and administration.

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